Norman Hsu, a name Hillary Clinton wants to forget, faces new allegations
Political fund-raiser Norman Hsu used his connections to politicians--Bill Clinton and Hillary Clinton were the main ones--to con people into investing in his pyramid scheme, the Securities and Exchange Commission charges in a complaint today.
In papers filed today in federal court in Los Angeles, the SEC said Hsu and one of his companies, Next Components, operated a $60 million Ponzi scheme. He used investors’ money to pay his “sales agents, make political campaign contributions, and support Hsu’s luxurious lifestyle,” the SEC said.
Hsu bundled more than $1 million for an array of politicians, most of them Democrats, starting in 2004. He outdid himself in the Democratic primary, when he raised in excess of $800,000 for Sen. Clinton.
Clinton sought to limit the fall-out story by returning the money to donors solicited by Hsu.
Hsu’s scheme unraveled a year ago after Times reporter Chuck Neubauer and then-Times reporter Robin Fields disclosed that he was a fugitive from a fraud conviction in the early 1990s in suburban San Francisco. Hsu made a court appearance in 2007, posted $2 million bond, then fled again, by train. He was apprehended in Colorado after he made what had been described as a suicide attempt.
Linda Chatman Thomsen, SEC’s Division of Enforcement director, said Hsu used some investor money to make campaign donations, and “then used the veneer of respectability created by his political connections to persuade his investors that the investments he offered were legitimate.”
“This deception convinced investors to continue to invest with Hsu, even as he and his company allegedly siphoned away investor funds to pay for his own extravagant lifestyle and to finance a Ponzi scheme,” the SEC alleges.
Hsu is in custody awaiting trial on federal criminal fraud charges in New York.
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